Editor’s note: “Auditing the Storm: Disaster 4117” is a joint investigative series by Oklahoma Watch and KGOU Radio on how federal and state disaster aid is being spent in the wake of the violent tornadoes and storms of spring 2013.
Among the more than 900 federal disaster loans offered because of the 2013 storms in Oklahoma, the largest was to cover damage to a hotel east of downtown Oklahoma City.
The 188-room Bricktown Hotel and Convention Center, located about three miles east of the Bricktown entertainment district, was approved for a $748,500 disaster loan from the U.S. Small Business Administration for damage in the May 31 storms.
Many businesses and residents approved for storm loans rejected the offers. But the Bricktown Hotel, which court records show faced financial problems stemming from storm damage in 2009, likely would have closed if not for the 2013 disaster loan, said the hotel’s owner, Tom Seabrooke.
“If we hadn’t gotten it (the loan), we would be closed, and 40 people would be out of work,” said Seabrooke, who owns the hotel through his firm, Bricktown Capital LLC.
The story of the Bricktown Hotel’s experiences with damage from two storms five years apart points to how damage can vary widely in one area and how it can lead to disputes over the extent of insurance coverage.
The Bricktown Hotel is on the northeast corner of E Reno and Martin Luther King avenues. That area received far less damage than Moore and south Oklahoma City in the May 20 and May 31 storms. Seabrooke said the May 31 storm, which also spawned tornadoes in El Reno and south Oklahoma City, caused substantial wind, hail and water damage to the hotel.
Nearby businesses were more fortunate. Managers at the nearby Econo Lodge Inn and Motel 6 hotels, and the next-door Petro truck stop, said they received no damage. Frank Barnes, emergency manager for Oklahoma City, said he had no reports of damage or tornado activity in that area east of downtown.
But flash flooding and some roof damage occurred in the heart of downtown, and a homemade YouTube video shows the Bricktown Hotel’s swimming pool spilling over on the night of May 31, with water washing up against the hotel.
The SBA does not discuss or disclose most details of individual loan applications, but said it conducts on-site inspections of properties whose owners are seeking disaster loans. The Bricktown Hotel was the only disaster loan approved for a business in the 73117 ZIP-code area, SBA data shows.
Seabrooke said the hotel received more than $1 million in storm damage, particularly on the roof from wind and water. In June 2013, he applied for the SBA disaster loan, and it was approved in November. Seabrooke said he has received less than half of the $748,500 loan offer because the cost of repairing the damage is being incrementally reimbursed from the loan funds as the work is completed. The loan is secured by a mortgage held by the SBA, which an agency spokesman said is not unusual.
One issue is that the owner asserts the insurance company did not cover all of the costs. Bricktown Capital LLC sued the insurer, Aspen Specialty Insurance Co., in June of this year in Oklahoma County District Court, alleging it failed to pay for legitimate damages caused by the storm, but dropped the suit in July, court records show. Seabrooke said the matter might go to court again.
A spokesman for Aspen Specialty declined to comment.
This would not be the first time the hotel had fought an insurance company to pay for damage suffered in a severe storm.
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Oklahoma Watch is a nonprofit, nonpartisan journalism organization that produces in-depth and investigative content a range of public-policy issues facing the state. For more Oklahoma Watch content, go to www.oklahomawatch.org.